U.K. promoter 3A Entertainment has cut free of its involvement with Jack Utsick’s Worldwide Entertainment under the condition that its directors don’t immediately sell the company to one of the live music industry big guns.
Michael I. Goldberg, the official receiver appointed to sort out the troubled U.S. promoter’s affairs, has agreed that 3A can buy back the 49 percent of the company owned by Utsick’s WWE, provided the U.K. company’s directors don’t hive off most or all of it to a corporate such as AEG or Live Nation before July 27th.
If it is sold off to one of the major players before that date, then Utsick’s company – through the official receiver – would still have claim to 49 percent of the proceeds.
3A is a partnership between Jack Utsick Presents, which holds 49 percent, with a further 49 percent shared between U.K. directors Pete Wilson, Martyn Stanger and Dennis Arnold. There’s a floating 2 percent ownership interest.
"We’ve done a deal to buy the rest of the company back from the receiver and now we’re fully independent again," Wilson told Pollstar.
Buying back the shares for £1 looks to be a good deal on its face but 3A also has to pay the receiver US$1 million (£507,189) of the £2 million WWE claims to have lent it in 2003.
Completing the deal, which was approved by a South Florida U.S. district court judge in the run up to Christmas, also means 3A has to wipe the US$392,000 (£212,000) that WWE owes it.
Both Goldberg and 3A are likely to be reasonably pleased with the compromise.
Last August, the receiver warned Wilson, Stanger and Arnold that he’d take legal action against them if they tried to get clear of Utsick by winding up 3A.
He gave them until April 27 of this year to either repay the loans from WWE or buy Utsick’s share of 3A for US$1 million.
He also told 3A it had to accept direct responsibility for the money it owes the British government in taxes, which stood at £336,000 (US$685,000) at the time.
The December deal also makes provision for this, so whoever is chasing Utsick for cash, it isn’t the British tax inspector.
The US$1 million loan repayment to WWE will help swell its coffers before the January 25 hearing in U.S. District Court, Southern Florida division, when Judge Huck will rule on the best claims mechanism for working out what Utsick’s companies’ investors are owed.
Utsick is under the scrutiny of the U.S. Securities and Exchange Commission for allegedly relieving 3,300 investors of close to US$300 million spanning from 1998 to 2005.
His company, Worldwide Entertainment, is in court-ordered receivership under Goldberg. Utsick lives on a $10,000 per-month allowance while lawyers and accountants sort out his global financial and legal situation.
Utsick built an empire that as recently as 2005 made him the fourth-largest U.S. concert promoter in terms of total tickets sold.
But according to a September 18 piece in the Miami Herald, Utsick’s accounting system was shoddy, his international interests too far-flung to manage and his books a disaster waiting to happen.